- PPF benefit reductions permitted provided member does not fall below poverty threshold (Pensions-Sicherungs-Verein VVaG v Bauer)
- What are the practical implications of this case?
- What was the background?
- What did the CJEU decide?
- Case details
Pensions analysis: In the event of employer insolvency, Article 8 of Directive 2008/94/EC (the EU Insolvency Directive) does not prevent proportionate reductions from being made to members’ occupational pension benefits, according to the Court of Justice of the European Union (CJEU) in Pensions-Sicherungs-Verein VVaG v Bauer (C168/18). In its judgment of 19 December 2019 (which departs from the opinion of Advocate General Hogan dated 8 May 2019), the CJEU concluded that a reduction in the amount of occupational pension benefits accrued to a former employee, by reason of their former employer’s insolvency, can be disproportionate if the member lives, or would live as a result of the reduction, below their Member State’s at-risk-of-poverty threshold (as determined by Eurostat). This may be the case even in circumstances where a member receives an amount at least equal to half of their accrued pension rights.
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